We take a look at some of the key performance indicators (KPIs) that are essential in the freight shipping industry. Managing logistics spend efficiently is one of the most important processes for all shippers, and also one that can present the most problems. These KPIs are also useful when it comes to tracking the right data metrics to manage their logistics spend better.
Running & Average Monthly Spend Amounts
The two costs above are probably the most critical KPIs for the shipping industry, which is why tracking them is so important. Keeping track of these costs helps managers to view and lessen disruptions by getting into the specific service levels, markets or carriers to avoid spending more than the budget. Analyzing these trends also helps with promoting more efficient management and improved carrier compliance too.
This is one of those metrics that helps determine the overall success of the logistics of a business. It is largely reliant on having an on-time pickup rate, and if the delivery service fails then it often becomes apparent that carriers are not able to meet realistic pickup or delivery expectations. This data is useful when it comes to justifying an expansion of your carrier network or stopping work with an existing carrier.
Weight distribution is another KPI that helps shippers gain a better understanding of how carriers view and analyse their business. The fluctuations in cost per pound and per package also provide insight into what is driving logistics spend.
Tracking zone distribution helps with measuring experience and logistics costs. As the zone increases, so does the distance for transport and the coinciding costs. This data can be used to assess current distribution strategies and determine whether new distribution centres are necessary. This data can also help with reducing delays and avoiding waste.
Freight Invoice Accuracy
This might be one of the most important KPIs for the shipping industry. It looks at the ratio of the total invoices free of errors, compared to the total invoices. Incorrect classes, duplicates, accessorial mistakes and subpar ratings can impact invoice accuracy, and if carriers continue to show low accuracy ratings, this can coincide with costly changes to budgets.
These are just a few of the KPIs that those in the shipping industry could use to help businesses thrive. By having all the data you need readily available to you, making the right decisions for your business is easier. This is where TSI’s technology comes in!